Distressed Property Solution

Monday, May 21, 2012

Distressed Properties: Options for Distressed Seller

A distressed
property, in real estate terminology, means that a property is under
foreclosure and is up for sale by the mortgagee. Characteristics of distressed
property are oftentimes having a negative impact on the fair market value of
the property. It is being sold by land owner to avoid foreclosure and at the
same time to try and cut the financial loses.

If you are one of
the land owners with distressed property, know that you are not alone. It is a
sad fact that facing foreclosure is an overwhelming experience, but there are
several options for distressed sellers other than foreclosure. If you missed
payments for temporary reasons that have been remedied, you have the option to
reinstate the mortgage. Reinstatement is the easiest way to avoid foreclosure
as it does not need the mortgagor or lender’s approval. You can simply ask the
total amount, which includes missed payments, late fees and legal fees, owed to
date and pay for it. Once the delinquent amount is paid in full, the mortgage
is reinstated.

Another option to
consider is forbearance or re-payment plan. The good thing with re-payment plan
is it allows the owner to pay the delinquent amount over time; however, owner
is required to submit a financial documentation proving that he will be able to
comply with the terms of repayment plan. In forbearance, lender will add the
missed payments on top of the regular loan amortization for a period of time,
for example, 12 months. Once the owner completes the 12th payment,
the mortgage will go back to its regular amount.

In the event that
the land owner can’t qualify for the two options mentioned earlier, he has the
option to sell his land via short sale. This process involves putting the land
on the market and the owner must have financial hardship to qualify. In this
case, financial hardship is no longer in question. It is just a matter of
presenting the necessary documents as proofs of financial hardship. Short sale
allows the owner to salvage his credit score and keep the foreclosure off his
record. While short sale seems straightforward, it is a complicated process and
needs the expertise of experienced professionals. To keep yourself free from
stress over short sale, you can sell your land to Lucas Properties LLC. Lucas
Properties provides cash for distressed properties minus the hassle of
traditional selling process.